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Future Health Care Challenges

Health

ROBERT J. BLENDON

CATHERINE DESROCHES

Future Health Care Challenges

Forecasting the future of health care and health policy is an imperfect science. Among the predictions made in the mid-1980s were that there would be a physician surplus, a growing number of elderly people, an increase in the number of people in managed care plans, restructured health benefits, new technologies, more for-profit health care delivery, rising health care costs, and a restrained federal government role. All of these issues–with the exception of a physician surplus, which is still being debated–turned out to have an impact on health policy. Several of these will continue to challenge policymakers during the next decade, and new or reemerging issues will also pose challenges.

Rising health care costs. We predicted in 1986 that health care spending would reach 14 percent of the nation’s gross domestic product (GDP) by 2000. In 2001, it reached 14.1 percent of GDP, and it is expected to be 17.7 percent by 2012. In the 1990s, it was thought that managed care and government limits on overall spending would restrain rising costs. Although managed care did restrain cost growth for a few years, the recent performance of individual health plans suggests that this will not be a major vehicle for future cost containment. The government is likely to try to constrain Medicare and Medicaid spending, but it is unlikely that there will be an overall national limit placed on health care spending, such as that proposed by the Clinton administration. Rather, we expect to see both business and government asking the public to pay more out of pocket for their health insurance and the care they receive.

The biggest challenge is the continued failure of decisionmakers to reach a consensus on how to address the major health care problems facing the country.

The tiering of health care. Historically, disparities in access to health care and health outcomes were seen between insured and uninsured people. However, the new approach to cost containment, which asks individuals to pay more for their own health care, is going to lead to tiering, in which those with higher incomes will be able to afford a wider range of health care services than much of the middle class and those with lower incomes. This trend is already visible. Several studies have found that middle-class insured people experience more problems getting care that are related to cost than do people with higher incomes. In addition, middle-class people are substantially more worried than those with higher incomes about paying for health insurance and health care in the future.

Growing numbers of elderly people. During the next decade, the proportion of U.S. citizens who are age 75 or older will grow from 17 million to 19 million. Death rates are steadily decreasing, while life expectancy has been increasing. These trends would suggest a rapid increase in funding for long-term care and the development of alternatives to nursing homes. But reduced state budgets, Medicare trust fund projections, employer reductions in retiree health benefits, and slow growth in the private long-term care insurance market suggest that the nation’s older elderly will experience tiering in health care and shortages of some services. Individuals with higher incomes and private long-term care insurance coverage will have a wide variety of options available to them. But because of both insufficient financing and a lack of available services, middle-class people and those who rely on publicly financed

The uninsured. In 2001, 41 million people had no health insurance. During the early 1990s, the number of uninsured decreased as more people gained insurance through their employers. But by the end of the decade, the number of uninsured had again increased, as the economy softened and the number of people with employer-sponsored coverage decreased. We see nothing to suggest that this trend will not continue. A substantial body of research has shown that the uninsured do not receive the same amount of care as those with insurance, suffer serious health consequences as a result of being uninsured, and face serious financial problems when they do get care. Local health care systems, and safety-net hospitals in particular, experience financial strain when providing care for a large uninsured population. Without major new government spending, local health care systems will come under increasing financial pressure as the number of uninsured grows.

New technologies. In the mid-1980s, organ transplants were the expensive new technology, and the financing of these procedures is still difficult. But there are many new and expensive technologies on the horizon, drugs in particular, that are likely to be only partially covered by insurance. The recent debate over a Medicare drug benefit has publicized the lack of drug coverage among the elderly. However, what is less well known is that although many people with employer-sponsored insurance have drug coverage, they are being asked to assume an increasing proportion of the cost of their prescriptions. Thus, there may well be a conflict between the public’s interest in new technologies and efforts by government and employers to restrict coverage in an effort to control costs. With 89 new pharmaceuticals approved by the Food and Drug Administration and almost 4,000 clinical trials for new medicines taking place in 2002, it remains to be seen how many of these new treatments will be fully covered by insurance. In addition, this lack of comprehensive coverage may discourage pharmaceutical companies from developing products that are clinically beneficial but not financially advantageous.

New and reemerging infectious diseases. During the 1980s and well into the 1990s, the health field shifted its attention to the problem of chronic disease, and took the view that infectious diseases were no longer a threat in the United States. The recent emergence of severe acute respiratory syndrome and West Nile virus, the steady increase in HIV/AIDS domestically and its rapid growth worldwide, and the emergence of multidrug-resistant bacteria have challenged this view. It is now clear that infectious diseases remain a threat, which will likely lead to greater interest in specialization in infectious disease and in rebuilding the public health system.

The threat of terrorism. The health care system will face increasing challenges in preparing to deal with the aftermath of terrorist attacks. In many cases, these preparations will require the diversion of other resources. Hospital bed closures during the past decade have substantially weakened the surge capacity of the system. As shown by its response to the anthrax attacks in the fall of 2001, the public health system lacks the capacity to quickly and effectively deal with a bioterrorist attack. There will be considerable pressure to improve the capacity of local public health systems in coming years in order to ensure that these systems are prepared.

Rediscovery of lifestyle-related health issues. Smoking and obesity are among the major threats to health in the United States. Although many such lifestyle issues have been important to public health since the 1970s, we may see businesses and government becoming increasingly involved in trying to change behaviors, in order to keep health care costs down. Possible actions include the introduction of new insurance products that provide a carrot-and-stick incentive system for enrollees. Positive incentives to engage in or maintain healthy behaviors might include discounted health club memberships and free smoking cessation programs. Individuals who do not work to change unhealthy behaviors might be sanctioned. For example, people who smoke might have to pay more for their health insurance.

Based on the experiences of the past decade, the biggest challenge facing the U.S. health care system, however, does not appear to be any of those listed above. Rather, it is the continued failure of decisionmakers to reach a consensus on how to address the major health care problems facing the country. Several factors contribute to this failure: declining levels of civic participation; a high level of public distrust in the federal government; growing partisanship; a hardening of ideologies; and highly organized, powerful special interest groups.

If this impasse could be broken during the next decade, then the United States could see solutions to many of these problems. Without such action, the trends we report on here are likely to be the factors that shape the nation’s health care system in the next decade and beyond.

Robert J. Blendon is professor of health policy and political analysis at Harvard University’s School of Public Health and John F. Kennedy School of Government. Catherine DesRoches (cdesroch@hsph.harvard.edu) is a senior research associate at the Harvard School of Public Health.